NEW YORK Feb 22 (Reuters) - Canada's Valeant
Pharmaceuticals International Inc agreed to
acquire gastrointestinal drugmaker Salix Pharmaceuticals Ltd
in an all-cash deal valued at about $10.1 billion, the
two companies said on Sunday.

The deal for Salix, known for its irritable bowel syndrome
drug Xifaxan, was approved by the boards of directors of both
companies, the companies said in a news release.

The companies said the deal had an enterprise value of $14.5
billion, which would include Salix's debt and any cash on hand.
Valeant will pay $158.00 a share, valuing the all-cash
transaction at about $10.1 billion.

The merger is expected to yield more than $500 million in
annual cost savings within six months, the release said.

The transaction is expected to close in the second quarter
of 2015, and is subject to customary closing conditions and
regulatory approval.

The deal is the largest ever for Laval, Quebec-based
Valeant, which lost a takeover contest for Allergan Inc
last year. The usually acquisitive Valeant slowed its buying
pace dramatically while it pursued Allergan, and Chief Executive
Michael Pearson said last month that it would focus in 2015 on
buying smaller, private companies.

Pearson said in the release that Salix, based in Raleigh,
North Carolina, was an "ideal strategic fit" for Valeant.
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